The debt and equity mix is an example of a financial leverage ratio and indicates the extent to which borrowed funds are used to finance assets. What are the main factors that go into determining the right mix of equity and debt? If debt is always cheaper than equity, why have equity?

The debt and equity mix is an example of a financial leverage ratio and indicates the extent to which borrowed funds are used to finance assets. What are the main factors that go into determining the right mix of equity and debt? If debt is always cheaper than equity, why have equity?

Expert Answer

The financial leverage ratio shows the combination of debt and equity. The meaning of debt equity ratio is for $1 of equity how much debt is raised by View the full answer